Petition for Writ of Certiorari — Western Airlines, Inc. v. California

: .

84-668 () jimi

FIL]

No.

yo

IN THE

Supreme Court of the United States. “~~ |

SO Oe RE BE

OCTOBER TERM, 1984

WESTERN AIRLINES, INC.,

a Delaware corporation,

Petitioner,

V.

PEOPLE OF THE STATE OF CALIFORNIA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI /

TO THE COURT OF APPEAL OF THE (

STATE OF CALIFORNIA

EDGAR PAUL BOYKO

ROBERT K. SCHRANER

MILLER, BOYKO AND BELL

110 Juniper Street

San Diego, California 92101-1598

Telephone: (619) 235-4040

Attorneys for Petitioner.

INTERIM PRINTING & MAILING COMPANY

1105 WEST MORENA BOULEVARD. SAN DIEGO. CALIFORNIA G2110 — 275 3050

—oo

eke

QUESTION PRESENTED

Does federal law preempt state regulation of the form and con-

tent of an interstate air carrier’s advertising of its rates, routes and

services?

TABLE OF CONTENTS

PUI CRON PPRMIIEOEEEOD occ nc ccnccnsessecoeses

FAS OP AU TERRE ies oo cc cccc nn cecensecenes

CPPS EY 6 ih sia vcnsaeeadstxedstectenens

FR MIRE 6.0 von exis awed gases sane ebaneeyenne

CONSTITUTIONAL PROVISIONS, STATUTES

PARED RULERS CVO VE occ cece cesensccenes

STA CEN E OF THB CARE once scenic ccaceneans

REASONS FOR GRANTING THE WRIT...........

A. THE AIRLINE DEREGULATION ACT OF

1978 EXPRESSLY PREEMPTS STATE

REGULATION “RELATING TO RATES,

ROUTES OR SERVICES”’ OF AN

INTERSTATE AIR CARRIER ..............

B. THE PERVASIVE SCOPE OF FEDERAL

REGULATION OF INTERSTATE AIR

CARRIERS PREEMPTS STATE REGULA-

TION OF DECEPTIVE RATE

REF VE CE 0 6 50h 8 wane dened (eeeahe vanes

C. STATF REGULATION OF INTERSTATE

AIR CARRIERS’ ADVERTISING OF THEIR

RATES, ROUTES AND SERVICES IMPOSES

AN IMPERMISSIBLE BURDEN ON

INTERSTATE COMMERCE ...............

Page

iv

12

TABLE OF CONTENTS (Coniinued)

D. STATE REGULATION OF INTERSTATE

AIR CARRIERS’ ADVERTISING OF THEIR

RATES, ROUTES AND SERVICES

CONFLICTS WITH THE PRIMARY

JURISDICTION OF THE CAB AND

DEPARTMENT OF TRANSPORTATION ...

a. Ue cn wueeet CALL b seh CRM RS AOA

ES ee ee

APPENDIX A - Opinion of the Court of Appeal ...

APPENDIX B - Denial of Petition for Hearing in

the Supreme Court of the State

Ee eee oar

APPENDIX C - Constitutional Provisions,

Statutes and Rules Involved ......

Page

C-1

- Wwe

TABLE OF AUTHORITIES

Page

CASES

United States Supreme Court Cases:

Alessi v. Raybestos-Manhattan, Inc.,

ee ee EE oh tie 0 hae ce ecu cendennces 5

American Airlines, Inc. v. North American Airlines,

SL: PI Sa cuba cee weanceecsane 8,14

Far East Conference v. United States,

ey I oc ie kencvan eens > v8 teases 14

Hicklin v. Orbeck, 437 U.S. 518 (1978)... ............ 12

Hood & Sons v. Dumond, 336 U.S. 525 (1949) ........ 12

Hunt v. Washington Apple Advertising Comm’n, |

NET oink one ud KcewetnseieeKess 13

Nader v. Allegheny Airlines, 426 U.S. 290 (1976) ...... 6,15

Pan American World Airways, Inc. v. United States,

ap ke cee dsb es valesee's 14,15

Pennsylvania v. Neison, 350 U.S. 497 (1956) .......... 13

People v. Western Airlines, Inc., 155 Cal.App.3d 597,

ye ROS) eee ee eee 2

Raymond Motor Transportation, Inc. v. Rice,

Se MEE 66 0h 06400 <o8scc6esesdas 13

San Diego Building Trades Council v. Garmon,

PUP UE 6 434646500 Racndneonee una 15

“Ve

TABLE OF AUTHORITIES (Continued)

CASES (Continued)

United States Supreme Court Cases (Continued):

Sears Roebuck & Co. v. San Diego County District

Council of Carpenters, 436 U.S. 180 (1978) .....

Shaw v. Delta Airlines, Inc.,

Se Se INS <b .acn eo 6b0a wakes knees

Southern Pacific Co. v. Arizona, 325 U.S. 761 (1945) ..

United States v. Western Pacific R.R. Co.,

BERS SOEUNOED 6.666 awh ecane eu .de6eeseunds

Federal Cases:

Brunwasser v. Trans World Airlines, Inc.,

541 F.Supp. 1338 (W.D. Pa. 1982) ............

Buczynski v. General Motors Corp., 616 F.2d 1238

(3d Cir. 1980), aff’d on other grounds, Alessi

v. Raybestos-Manhattan, Inc., 451 U.S. 504

Lo Per rT ere er Te Tere Pe eC eT TT rere

Enders v. American Patent Search Co.,

te FT le ee reer e rere

Howard v. Uniroyal, Inc.,

TEP oe CRIs TEED onc eke sucnscees

People v. Civil Aeronautics Board,

Ee 3 ae Se errr rer errr

Page

13

11

- vi -

TABLE OF AUTHORITIES (Continued)

CASES (Continued)

California Cases:

Payne v. United California Bank, 23 Cal.App.3d 850,

100 Cal Rptr. 672 (A972) ww cca ccccccccceneces

Feople v. Pacific Land Research Company,

20 Cal.3d 10, 569 P.2d 125, 141 Cal. Rptr. 20

(it) SOIREE EP ETER ECT EEC eT IT TTT

United States v. Superior Court,

19 Cal.2d 189, 120 P.2d 26 (1941) .............

Illinois Cases:

County of Cook v. Priester, 22 Ill.App.3d 964,

pk & Bod | Pereerr rr Seer er eae

Village of Bensenville v. City of Chicago,

16 Ill. App.3d 733, 306 N.E.2d 562 (1973).......

Civil Aeronautics Board Cases:

Delta Enforcement, 78-9-140 C.A.B. Adv. Dig. p. 76

GD, BOVE so occu sncansscceesvassssnsteeeat

International Tours v. Qantas Airways, 78-10-129,

C.A.B. Adv. Dig. p. 61 (Dec. 29, 1978) ........

Pan American Enforcement Proceeding, 79-9-95,

C.A.B. Adv. Dig. p. 53 (Sept. 1979) ...........

World Airways v. American, et al., Complaint,

79-10-7 C.A.B. Adv. Dig. p. 5 (Oct. 1979) ......

Page

14

14

16

11

10

10

1]

- vii -

TABLE OF AUTHORITIES (Continued)

UNITED STATES CONSTITUTION

GS Svc ac Levawed we Lae bhdddan ce

STATUTES

Federal Statutes:

ee ME BEPOND w 6 6 0 ccdicdadanseeceeaeseon

29 U.S.C.

MEM, ccc daca asdbaccesecka tee

a ots Se ie ee aman

49 U.S.C.

ES Sa A AA ogc A re On RE St

etek Lab cee ace nates Rak veee nee

Ot ee eee

eit ee bak 6 owe eae

ER Ay Te PO rte Pat

ne ino dns sé Cab bok ce beknce Bk

I aaa A oe od

California Statutes:

California Business and Professions Code,

ge a

ADMINISTRATIVE REGULATIONS

14 C.F.R.

so onc ca bec eeebabak eee

UGE EI, osc bi.n'scue0eeeeccavace

Page

12

6,9,10,14

9

9

6

10

10

- Vili -

TABLE OF AUTHORITIES (Continued)

ADMINISTRATIVE REGULATIONS (Continued)

14 C.F.R.

Sn nau 4eGanekebek OOe8

ES nee eT are

is cee eaeesannens’

OTHER AUTHORITIES

Civil Aeronautics Board Sunset Act of 1984,

Pub. L. No. 98-443, Section 3(e) (Oct. 4, 1984) ..

GAO, Legislation Needed to Clarify Future of

Consumer Protection and Federal Preemption

After the Civil Aeronautics Board Sunsets

ee eek shan ke

130 Cong. Rec. H 5237 (daily ed. June 5, 1984) ........

130 Cong. Rec. S 10066

Ss SUN EE, HUE 3.6 cc ncceccacessseesars

Page

10

10

10

14

14

No.

IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1984

WESTERN AIRLINES, INC.,

a Delaware corporation,

Petitioner,

Vv.

PEOPLE OF THE STATE OF CALIFORNIA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE COURT OF APPEAL OF THE

STATE OF CALIFORNIA

Petitiouer, Western Airlines, Inc., respectfully prays that a Writ

of Certiorari issue to review the judgment of the Court of Appeal

of the State of California, Fourth Appellate District, entered on

May 8, 1984.

otis

OPINION BELOW

The opinion of the Court of Appeal of the State of California,

Fourth Appellate District (the ‘‘court of appeal’’), reversing the

judgment of the Superior Court of the State of California for the

County of San Diego (the ‘‘superior court’’), is reported in People

v. Western Airlines, Inc., 155 Cal.App.3d 597, 202 Cal.Rptr. 237

(1984), and is printed in Appendix ‘‘A.”’

JURISDICTION

The court of appeal issued its opinion reversing the judgment of

the superior court on May 8, 1984. A Petition for Hearing in the

Supreme Court of the State of California was timely filed on June

18, 1984, and was denied on July 26, 1984. The notice denying the

petition for hearing is printed in Appendix ‘‘B.’’ This petition for

a writ of certiorari was filed within ninety (90) days of that date.

The jurisdiction of the United States Supreme Court is invoked

under 28 U.S.C. § 1257(3).

CONSTITUTIONAL PROVISiONS, STATUTES

AND RULES INVOLVED

The constitutionai provisions, statutes and rules involved are set

forth in Appendix ‘‘C.”’

STATEMENT OF THE CASE

In October, 1982, the People of the State of California

(hereinafter ‘‘People’’) filed a civil complaint against Western

Airlines, Inc. (hereinafter ‘‘Western’’), alleging violations of Sec-

tions 17200 and 17500 of the California Business and Professions

Code for alleged deceptive and unfair advertising on three dif-

ferent advertising programs. Western demurred to the complaint

x

on the grounds that the People’s action was preempted by the pro-

visions of the Federal Aviation Act and Airline Deregulation Aci

of 1978 and encompassed matters within the primary jurisdiction

of the Civil Aeronautics Board (‘‘the CAB’’).

At various times in 1982, Western had placed three multi-media

advertising programs which offered reduced round-trip fares

when, as expressly specified in the advertisements, the customer

purchased ‘‘round-trip full fare Coach or First Class Ticket[s] (Y)

or (F) class only.’” The promotional fare was not available if a

ticket from another class was purchased.

The complaint filed by the People asserted that each of the three

advertising campaigns was in violation of state laws against decep-

tive and unfair advertising. In the first program, Western’s

written advertisements provided that the customer would receive a

$100 round-trip ticket to Hawaii if he purchased any ‘‘full fare

Coach (Y) or First Class (F or FN) round-trip ticket on any

Western flight in the United States over 400 air miles one way.”’

The second promotion offered round-trip tickets to anywhere

Western flies in the continental United States or Alaska for $100,

if the customer purchased any ‘‘full fare round-trip Coach (Y) or

First Class (F or F! |) ticket on any flight in the Uniied States

(except Hawaii). ...’’ Finally, the third program again offered a

round-trip ticket to Hawaii for $100 if the customer purchased any

**round-trip full fare Coach or First Class ticket (Y or F class only)

to anywhere Western Airlines flies in the United States, except

Alaska. Your trip must be at least 300 air miles each way.”’

In an order dated April 1, 1983, the superior court held that the

complaint was preempted by federal law and therefore sustained

Western’s demurrer without leave to amend and dismissed the

action. On May 6, 1983, the People filed a Notice of Appeal from

the judgment dismissing the action. In its decision filed on May 8,

1984, the court of appeal determined that federal law did not

preempt state regulation of an interstate air carrier’s allegedly

a

deceptive and unfair advertising of its rates, routes and services

and reversed the judgment of the superior court.

REASONS FOR GRANTING THE WRIT

A. THE AIRLINE DEREGULATION ACT OF 1978

EXPRESSLY PREEMPTS STATE REGULA-

TION ‘‘RELATING TO RATES, ROUTES OR

SERVICES”? OF AN INTERSTATE AIR CAR-

RIER.

Interstate air commerce clearly and logically requires a uniform

system of regulation. Recognizing this, Congress in 1958 enacted

the Federal Aviation Act, contained at 49 U.S.C. §§ 1301, et seq.,

to regulate air commerce and civil aeronautics for, among other

things, the prevention of ‘‘unfair or deceptive practices.’’ 49

U.S.C. § 1302(a)(3).

Prior to 1978, the Federal Aviation Act did not contain a

specific preemption clause. However, decisions reviewing Con-

gressional intent and the burden state regulation would place upon

air commerce held that state regulation of interstate air commerce

was in fact preempted by the Federal Aviation Act. County of

Cook v. Priester, 22 Ill.App.3d 964, 318 N.E.2d 327 (1974) (weight

of aircraft); Village of Bensenville v. City of Chicago, 16

Ill.App.3d 733, 306 N.E.2d 562 (1973) (noise and pollution).

With the Airline Deregulation Act of 1978, Congress specifically

preempted state regulation of interstate air carriers, just as the

federal government was itself deregulating the industry:

(a) Preemption.

(1) Except as provided in paragraph (2) of

this subsection, no State or political subdivision

thereof and no interstate agency or other political

agency of two or more States shall enact or enforce

é@s

any law, rule, regulation, standard, or other provi-

sion having the force and effect of law relating to

rates, routes, or services of any air carrier having

authority under Title IV of this Act [49 USCS §§

1371 et seq.] to provide interstate air transporta-

tion. [Emphasis added.] 49 U.S.C. § 1305 (1984).

Except for the case at hand, the scope of the foregoing preemption

clause has not been construed. However, an analogous preemp-

tion clause in the Employee Retirement Income Security Act of

1974 (ERISA), contained at 29 U.S.C. § 1001, et seg., provides for

the preemption of state laws which ‘‘relate to any employee benefit

plan....’’ 29U.S.C. § 1144(a). In Shaw v. Delta Air Lines, Inc.,

___ U.S. ___, 103 S.Ct. 2890, 2900 (1983), the language ‘‘relate

to’’ as used in the ERISA preemption statute was broadly con-

strued as follows: ‘‘A law ‘relates to’’ an employee benefit plan,

ir. the normal sense of the phrase, if it has a connection with or

reference to such a plan.”’

The Attorney General of the State of California has asserted

that the regulation of deceptive or misleading advertising by in-

terstate air carriers falls within the state’s police power. However,

the express preemption clause and the pervasive nature of federal

regulation in this area make it clear that state regulation must fall.

Cf. Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504 (1980),

where a New Jersey statute governing worker’s compensation

awards was held preempted by ERISA, despite the fact that

worker’s compensation (like the regulation of deceptive advertis-

ing) traditionally fell within the state’s police power. In the case at

hand, the State of California has sought to indirectly do what it

cannot do directly -- regulate Western’s rates, routes and services

under the claim of deceptive advertising.

In reversing the decision of the superior court, the court of ap-

peal concluded that state regulation of an air carrier’s advertising

of its rates, routes or services does not ‘‘relate to’’ those matters.

Further, the lower appellate court determined that such regulation

-

of an interstate air carrier’s advertising was authorized by the

‘*savings’’ clause of 49 U.S.C. § 1506, and the decisions of Nader

v. Alleghany Airlines, 426 U.S. 290 (1976) and Brunwasser v.

Trans World Airlines, Inc., 541 F.Supp. 1338 (W.D. Pa. 1982).

However, these authorities are not well taken.

Section 1506 is nothing more than a standard savings clause,

customarily tacked on to regulatory statutes. It was part of the

Federal Aviation Act when it was adopted in 1958 and was neither

mentioned nor specifically amended by the Airline Deregulation

Act of 1978.' To the extent that it is inconsistent with the specific

preemption clause of 49 U.S.C. § 1305 and the extensive regula-

tions promulgated by the CAB, the savings clause is inapplicable.

The decision in Nader is not on point since it did not address the

question of preemption of state regulation as to matters in the

public interest. More importantly, Nader was decided in 1963 and

was based upon the provisions of the Federal Aviation Act in ef-

fect prior to passage of the Airline Deregulation Act of 1978 and

its express preemption clause. Accordingly, there was no express

preemption clause to be construed by the Court. In fact, the

Supreme Court in Nader expressly held that jurisdiction vested in

the CAB to regulate deceptive practices in the public interest under

Section 411 of the Federal Aviation Act (49 U.S.C. § 1381). The

decision in Brunwasser v. Trans World Airlines, Inc., 541 F.Supp.

1338 (W.D. Pa. 1982), is equally unpersuasive since the district

court’s limited discussion of preemption is itself dictum and did

not include any mention, much less any analysis, of the preemp-

tion clause of the Airline Deregulation Act of 1978 or the extensive

regulatory scheme established by the CAB concerning air carrier

advertising and unfair or deceptive practices.

' In its report to a Congressional subcommittee, the General Accounting Office

(‘“‘GAO’’) noted the potential conflict inherent between the two statutes and the

need for reconciliation of their provisions. GAO, Legislation Needed to Clarify

Future of Consumer Protection and Federal Preemption After the Civil

Aeronautics Board Sunsets (June i3, 1984) (Appendix I, at 7-8 and 20).

It is well settled that a preemption clause must be read ‘‘in its

normal dictionary sense’’ as indicating a broad pre-emptive intent

on the part of Congress. Buczynski v. General Motors Corp. , 616

F.2d 1238, 1250 (3d Cir. 1980), aff’d on other grounds, Alessi v.

Raybestos-Manhattan, Inc., 451 U.S. 504, 524 (1980); Shaw v.

Delta Air Lines, Inc., __. U.S. ___., 103 S.Ct. 2890, 2900 (1983).

As a part of the federal government’s deregulation of the air car-

rier industry, Congress adopted a specific preemption clause which

was intended to preclude the states from promulgating economic

regulations ‘‘relating to rates, routes or services’’ Of interstate air

carriers. The wording, ‘‘relating to’’ rates, routes or services

must lead to the conclusion that a state’s efforts to conirol the con-

tent of an air carrier’s advertising or the manner in which it adver-

tises its rates, routes, and services falls within the preemption

clause of Section 1305. Such regulations most certainly “‘pertain

to’’ and have a ‘‘bearing’’ upon rates, routes, and services. Cf.

Enders v. American Patent Search Co., 535 F.2d 1085, 1090 (9th

Cir. 1976).

B. THE PERVASIVE SCOPE OF FEDERAL

REGULATION OF INTERSTATE AIR CAR-

RIERS PREEMPTS STATE REGULATION OF

DECEPTIVE RATE ADVERTISING.

Any question concerning the constructin of the preemption pro-

visions of 49 U.S.C. § 1305 should be resolved by a review of the

structure of the Federal Aviation Act and Airline Deregulation Act

of 1978, the pervasiveness of the regulations implementing those

2 Officers of both the Department of Transportation and Federal Trade Com-

mission have indicated that the term ‘‘services’’ under the preemption statute in-

cludes both notice of terms of contract and unfair or deceptive practices. GAO,

Legislation Needed to Clarify Future of Consumer Protection and Federal

Preemption After the Civil Aeronautics Board Sunsets (June 13, 1984) (Appendix

I, at 7).

statutes and the need for uniform regulation. The CAB? has been

given specific jurisdiction under Section 411 of the Federal Avia-

tion Act to control unfair and deceptive practices:

(a) In the exercise and performance of its powers

and duties under this Act, the Board shall consider

the following, among other things, as being in the

public interest, and in accordance with the public

convenience and necessity:

* * us

(3) The availability of a variety of ade-

quate, economic, efficient, and low-price ser-

vices by air carriers and foreign air carriers

without unjust discriminations, undue

preferences or advantages, or unfair or decep-

tive practices, ...

(7) The prevention of unfair, deceptive,

predatory or anti-competitive practigns in air

transportation, .. .

49 U.S.C. § 1302.

The foregoing statute was modeled after a similar provision in

the Federal Trade Commission Act which also prohibits ‘‘unfair

methods of competition in commerce and unfaiz or deceptive acts

or practices.”’ American Airlines, Inc. v. North American

Airlines, Inc., 351 U.S. 79, 82 (1955). The Federal Aviation Act

> Under the Civil Aeronautics Board Sunset Act of 1984, Pub. L. No. 98-443, §

3(e) (Oct. 4, 1984), on January 1, 1985, the Department of Transportation will

assume all consumer protection powers and duties of the CAB, including the

prevention of unfair or deceptive practices by interstate air carriers.

_

also creates an extensive administrative enforcement scheme and

empowers the CAB to implement regulations to carry out the pur-

poses of the Act. 49 U.S.C. § 1324.

Additionally, 49 U.S.C. § 1381 gives the CAB the specific power

to investigate deceptive practices:

The Board may, upon its own initiative or upon

complaint by any air carrier, foreign air carrier, or

ticket agent, if it considers that such action by it

would be in the interest of the public, investigate

and determine whether any air carrier, foreign air

carrier, or ticket agent has been or is engaged in

any unfair or deceptive practices or unfair methods

of competition in air transportation or the sale

thereof. If the Board shall find, after notice and

hearing, that such air carrier, foreign air carrier, or

ticket agent is engaged in such unfair or deceptive

practices or unfair methods of competition, it shall

order such air carrier, foreign air carrier, or ticket

agent to cease and desist from such practices or

methods of competition.

The CAB is also statutorily authorized to investigate complaints

(49 U.S.C. § 1482), to file suit for violations of the Federal Avia-

tion Act and to seek appropriate injunctive relief. 49 U.S.C. §

In conformance with its powers under the Federal Aviation Act,

the CAB has specifically adopted regulations relating to advertis-

ing of an air carrier’s services which constitute a ‘‘deceptive prac-

tice’’ or an ‘‘unfair method of competition.

99

Thus, regulations

i.

have been enacted prohibiting misrepresentations‘ or misleading

advertising by ticket agents (C.F.R. § 399.80 (1984)) and mislead-

ing advertising concerning an air carrier’s schedule performance.

14 C.F.R. § 399.81 (1984). In addition, the CAB has specifically

determined what is a deceptive rate advertising practice with

respect to group tours. 14 C.F.R. § 399.84 (1984). By regulation,

the CAB has also mandated that air carriers provide a clear and ex-

plicit statement, arranged in a simple and systematic manner, of

their rates:

All fares, rates, and charges shall be clearly and

explicitly stated and shall be arranged in a simple

and systematic manner. Complicated plans and

ambiguous or indefinite terms shall not be used. So

far as practicable, the fares, rates, and charges

shall be subdivided into items or similar units, and

an identifying number shall be assigned to each

item or unit to facilitate reference thereto. 14

C.F.R. § 221.50 (1984).

in conformance with its authority, the CAB has also issued exten-

sive regulations as to the manner in which fares can be set and

stated. 14 C.F.R. §§ 221.54, et seg. (1984).

Pursuant to 49 U.S.C. § 1381 and the regulations it has pro-

mulgated, the CAB has in fact actively enforced its regulations on

unfair and misleading advertising. See, e.g., International Tours

v. Qantas Airways, 78-10-129, C.A.B. Adv. Dig. p. 61 (Dec. 29,

1978) (tour brochures with erroneous information); Pan American

Enforcement Proceeding, 79-9-95, C.A.B. Adv. Dig. p. 53 (Sept.

1979) (unfair practices in advertisements of round-trip flights,

flight bookings, availability of tickets, information regarding

* 14C.F.R. § 399.80 (1984) provides:

The word ‘‘misrepresentation’”’ used in this list includes any

statement or representation made in advertising or made orally

to members of the public which is false, fraudulent, deceptive

or misleading, or which has the tendency or capacity to deceive

or mislead.

=

discount rates and failure to disclose total cost of tickets); Delta

Enforcement, 78-9-140 C.A.B. Adv. Dig. p. 76 (Sept. 1979)

(newspaper advertisement of nonstop service for a flight which

was a connecting service); World Airways v. American, et al.,

compalint 79-10-7 C.A.B. Adv. Dig. p. 5 (Oct. 1979) (advertise-

ment of unrestricted fares).

It is apparent from the foregoing statutory and regulatory

scheme that the CAB has exercised jurisdiction over deceptive

advertising practices. The CAB has authority over rate aclvertising

and indeed over all advertising of rates, routes and services - to

the exclusion of state regulation. Not only has Congress preemp-

ted state regulations relating to an air carrier’s rates, routes and

services, but also, the CAB has itself expressly preempted state

regulation by virtue of its own regulatory scheme and enforcement

activities. People v. Civil Aeronautics Board, 581 F.2d 954, 960

(D.C. Cir. 1978) (‘‘The Civil Aeronautics Board is empowered by

Congress to preempt state regulatory agencies in interstate com-

merce... .’’)

The State of California’s complaint constitutes a regulation

‘relating to’’ Western’s ‘‘rates, routes and services.”’ By taking

issue with the rate and service descriptions utilized by Western,

the State of California is trying to supplant the CAB’s jurisdic-

tion over an air carrier’s alleged deceptive advertising practices.

Western, like many other interstate carriers, operates in a substan-

tial number of states. If each state regulated an interstate air car-

rier’s promotion and advertising of its tariff schedules, rates,

routes and services by imposing detailed and varied requirements,

a readable flight schedule could not even be produced, much less a

promotional campaign. Advertisements would be subject to con-

flicting regulation in several states, with each state demanding dif-

ferent rate descriptions, disclosures or terms of the promotion.

The onerous nature of such multiplicitous and conflicting regula-

tions demands a uniform system of regulation mandating federal

preemption.

-32-

The comprehensiveness and pervasiveness of the enforcement

scheme provided by the Federal Aviation Act and Airline

Dereguiation Act of 1978 and their implementing regulations for

violations of these Acts are self-evident. The detail and precision

with which Congress provided the means for the enforcement of

those Acts, as well as the manner in which the CAB has regulated

and enforced the area, logically leads to the conclusion that Con-

gress and the CAB left no room for state law actions to supple-

ment the remedies Congress detailed.

Varying state law interpretations of the obligation of interstate

air carriers to avoid ‘‘deceptive advertising practices’? would

frustrate the uniformity of decision necessary to develop a consis-

tent approach to federal regulation of air commerce. It would be

inconsistent with federal policy if local authorities retained the

power to make decisions respecting the rights and duties of in-

terstate air carriers that have been committed to the jurisdiction of

a federal administrative agency which has a nationwide overview

of the air carrier industry.

C. STATE REGULATION OF AN INTERSTATE

AIR CARRIER’S ADVERTISING OF ITS

RATES, ROUTES AND SERVICES IMPOSES

AN IMPERMISSIBLE BURDEN ON INTER-

STATE COMMERCE.

A state regulation which impedes the free flow of, and is

burdensome to, interstate commerce violates the Commerce

Clause established by Article I, Section 8, of the Constitution of

the United States. Southern Pacific Co. v. Arizona, 325 U.S. 761

(1945). The underlying purpose of the Commerce Clause is to

establish, promote and develop a national economic structure,

which allows free access to the national marketplace. Hood &

Sons v. Dumond, 336 U.S. 525, 537-39 (1949). Attempted intru-

sions upon the Commerce Clause have been diverse, and recent

Supreme Court decisions have emphasized the importance of

.

maintaining the structure of a national economic unit. See e.g.,

Hicklin v. Orbeck, 437 U.S. 518 (1978); Raymond Motor

Transportation, Inc. v. Rice, 434 U.S. 429 (1978); Hunt v.

Washington Aple Advertising Comm’n, 432 U.S. 333 (1977).

The People’s complaint is based upon the simple premise that

Western, in advertising a bonus program to purchasers of ‘‘full-

fare coach’’ tickets, is allegedly involved in a deceptive or

misleading advertising program. By way of its action, the State of

California is clearly attempting to regulate the manner in which

Western promotes and advertises its rates, routes and services.

Attempted regulation by up to fifty state regulatory agencies clear-

ly imposes the impermissible burden upon interstate commerce

and presents a distinct danger of conflicting determinations by the

CAB or Department of Transportation on one hand and by one or

more state enforcement agencies on the other. See Pennsylvania v.

Nelson, 350 U.S. 497, 505 (1956); Howard v. Uniroyal, Inc., 719

F.2d 1552, 1561-62 (11th Cir. 1983).

D. STATE REGULATION OF INTERSTATE AIR

CARRIERS’ ADVERTISING OF THEIR

RATES, ROUTES AND SERVICES CON-

FLICTS WITH THE PRIMARY JURISDIC-

TION OF THE CAB AND DEPARTMENT OF

TRANSPORTATION.

When a judicial action has been brought in the public interest

and involves the resolution of a claim which, under a regulatory

scheme has been placed within the special competence of an

administrative agency, that claim falls within the ‘‘primary

jurisdiction’’ of the agency. Accordingly, a court should defer to

the administrative agency and allow it to resolve the issue. United

States v. Western Pacific R.R. Co., 352 U.S. 59, 63-64 (1956).

Where the regulation of an industry has been entitled to a par-

ticular administrative agency, that agency is ‘‘better equipped than

courts by specialization, by insight gained through experience, and

-14-

by more flexible procedure’’ to resolve the issues relating to that

industry. Far East Conference v. United States, 342 U.S. 570,

574-75 (1952).

An extensive regulatory scheme has been established by federal

statutes and rules to prevent unfair or deceptive practices by inter-

state air carriers. By virtue of that regulatory scheme, the federal

agency responsible for overseeing and enforcing the same has

‘‘primary jurisdiction’’ of matters encompassed within claims of

alleged misleading advertising or unfair competition by an inter-

state air carrier, including claims of misleading advertising.

Under Section 411 (49 U.S.C. § 1381), the terms ‘‘unfair or

deceptive practices’’ and ‘‘unfair methods of competition’’ are

broader than common-law concepts of unfair competition. Ac-

tions to prevent such activities are brought in the public interest.

Pan American World Airways, Inc. v. United States, 371 U.S.

296, 306 (1962); American Airlines, Inc. v. North American

Airlines, Inc., 351 U.S. 79, 84 (1955). The action filed in this case

by the California Attorney General’s Office is similarly brought in

the public interest. People v. Pacific Land Research Company, 20

Cal.3d 10, 17, 569 P.2d 125, 141 Cal.Rptr. 20, 24 (1977); Payne v.

United California Bank, 23 Cal.App.3d 850, 856, 100 Cal.Rptr.

672, 676 (1972).

It has been recognized that the regulation of the air carrier in-

dustry has been committed ‘‘to an administrative agency of special

competence that deals only with the problems of the industry.”’

American Airlines, Inc. v. North American Airlines, Inc., 351

U.S. 79, 84 (1955). In view of the express congressional intent that

the Department of Transportation carry on the enforcement duties

and rules of the CAB,’ that expertise should continue.

5 130 Cong. Rec. S 10066 (daily ed. Aug. 8, 1984) (remarks of Senator Stevens);

130 Cong. Rec. H 5237 (daily ed. June 5, 1984) (remarks of Congressman

Mineta).

iit.

The action in the case at hand is an attempt to regulate an area

falling within the primary jurisdiction of a federal igency. The

Supreme Court has twice previously held that civil actions brought

in the public interest, and which attempted to regulate alleged un-

fair or deceptive practices of interstate air carriers, were subject to

the primary jurisdiction of the CAB. Nader v. Allegheny Airlines,

426 U.S. 290 (1976); Pan American World Airways, Inc. v. United

States, 371 U.S. 296 (1962). In Pan American World Airways,

civil antitrust claims were held barred by the CAB’s jurisdiction

under Section 411 to investigate and determine whether an air car-

rier was engaged in unfair or deceptive practices or unfair methods

of competition in air transportation. Similarly, in Nader, the

Supreme Court again held that actions brought in the public in-

terest to regulate alleged deceptive practices of interstate air car-

riers were subject to the primary jurisdiction of the CAB. Thus,

the Court determined that specific issues are to be referred to the

agency for initial determination in order to secure ‘‘[u}niformity

and consistency in the regulation of business entrusted to a par-

ticular agency.’’ 426 U.S. at 304.

The Attorney General of the State of California could have

brought his claim through the administrative enforcement scheme

specifically provided by Congress to regulate the allegedly decep-

tive or unfair practices of interstate air carriers, rather than

through a state law action. It is the nationwide responsibility of a

federal agency, and not the responsibility of each of the various

states, to monitor such activities. See San Diego Building Trades

Council v. Garmon, 359 U.S. 236, 244 (1959). See also Sears

Roebuck & Co. v. San Diego County District Council of

Carpenters, 436 U.S. 180, 197 (1978) (‘‘The critical inquiry,

therefore, is not whether the State is enforcing a law relating

specifically to labor relations or one of general application, but

whether the controversy presented to the state court is identical to

... Or different from . . . that which could have been, but was not,

presented to the Labor Board.’’). In any event, the CAB should

have been given the opportunity to investigate the claims of the

State of California and to a:sume jurisdiction under its regulatory

tii.

scheme. United States v. Superior Court, 19 Cal.2d 189, 195, 120

P.2d 26, 29 (1941) (‘‘[I]t lies within the power of the administrative

agency to determine in the first instance, and before judicial relief

may be obtained, whether a given controversy falls within the

statutory grant of jurisdiction.’’) However, the CAB was never

given that opportunity.

The power to regulate the deceptive practices or unfair competi-

tion of interstate air carriers has been granted to a federal agency,

the CAB until January 1, 1985, and the Department of Transpor-

tation thereafter, and falls exclusively within its jurisdiction.

A federal agency has been given the primary jurisdiction to

bring actions in the public interest to prevent unfair or deceptive

trade practices, and has exercised that jurisdiction through regula-

tions and its enforcement powers. The complaint brought by the

People of the State of California conflicts with the primary

jurisdiction of that federal agency. In light of the need for unifor-

mity, questions raised by the state complaint should have first

been referred to the federal agency for determination.

. 2

CONCLUSION

For the foregoing reasons, a writ of certiorari should issue to

review the judgment of the Court of Appeal of the State of

California, Fourth Appellate District.

DATED: October 24, 1984 4

Respectfully submitted,

MILLER, BOYKO AND BELL

By: EDGAR PAUL BOYKO

ROBERT K. SCHRANER

Attorneys for Petitioner

— -

APPENDICES

BEST AVAILABLE COPY

A-1

CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

THE PEOPLE, ‘

Plaintiff and Appellant,

v. D 000850

WESTERN AIRLINES, INC., ; 4 Civ. No. 28920

)

Defendant and Respondent.) (Super. Ct. No. 494202)

)

APPEAL from a judgment of the Superior Court of San Diego

County, William L. Todd, Jr., Judge. Reversed.

John K. Van De Kamp, Attorney General, Herschel T. Elkins,

Senior Assistant Attorney General, Albert Norman Shelden and

M. Howard Wayne, Deputy Attorneys General, for Plaintiff and

Appellant.

Miller, Boyko and Bell,. Edgar Paul Boyko and Fletcher W.

Paddison, for Defendant and Respondent.

The People sued Western Airlines, Inc., for civil penalties and

injunction, alleging Western violated Business and Professions

Code section 17500 and Civil Code section 1770, subdivision (m),

and engaged in unfair competition under Business and Professions

A-2

Code section 17200 et. seq., by making false and misleading

statements implying fare savings in advertising promotions.

Western demurred, asserting the complaint was preempted by 49

United States Code section 1305 and violated the commerce clause

of the United States Constitution (art. I, § 8). Western also

asserted under 49 United States Code section 1381 the Civil

Aeronautics Board (Board) had primary jurisdiction over com-

plaints about deceptive advertising and the court lacked subject

matter jurisdiction. After hearing, the superior court found the

matters raised in the complaint were preempted by federal law.

The court sustained Western’s demurrer without leave to amend.

The People appeal.

Under 49 United States Code section 1381, enacted as part of

the Federal Aviation Act of 1958, the Board in the public interest

may investigate and determine whether any air carrier ‘‘has been

or is engaged in unfair or deceptive practices or unfair methods of

competition in air transportation or the sale thereof’’; the Board

has power to order air carriers to cease such improper conduct.

Under 49 United States Code section 1506, also enacted as part

of the Federai Aviation Act of 1958, nothing in chapter 20 of title

49, United States Code (the Federal Aviation Program) ‘‘shall in

any way abridge or alter the remedies now existing at common law

or by statute, but the provisions of this chapter are in addition to

such remedies.”’

Under 49 United States Code section 1302(a)(7), as amended by

the Airline Deregulation Act of 1978, the Board in exercising its

powers and duties shall consider ‘‘as being in the public interest

... prevention of unfair, deceptive, predatory, or anticompetitive

practices in air transportation .. .”’

Under 49 United States Code section 1305(a), added by the

Airline Deregulation Act of 1978, no state or its political subdivi-

sion ‘‘shall enact or enforce any law . . . relating to rates, routes,

or services’’ of an authorized interstate air carrier.

A-3

Asseiting this lawsuit does not involve matters preempted by

federal law, the People contend the court erred in sustaining

Western’s demurrer. The Federal Aviation Program expressly

preempts state regulation of interstate air carriers only as to laws

‘‘relating to rates, routes, or services.’’ (49 U.S.C. § 1305(a).)

Here the People do not seek to enforce a law relating to rates,

routes or services; the People do not challenge Western’s rates,

routes or services. The People’s complaint involves the distinct

issue of the manner Western advertised its rates and services. (See

Brunwasser v. Trans World Airlines, Inc. (1982) 541 F. Supp.

1338, 1346.) 49 United States Code section 1305(a) does not in-

sulate Western from liability for violating California statutes pro-

hibiting false advertising.

Under 49 United States Code sections 1302 and 1381, Congress

granted the Board authority to regulate in the public interest un-

fair competition and deceptive practices by interstate air carriers.

However, nothing in the Federal Aviation Program suggests by

granting the Board such authority Congress intended to prevent

states from also regulating deceptive advertising practices by in-

terstate air carriers. (See Head v. New Mexico Board of

Examiners in Optometry (1963) 374 U.S. 424, 430-432; see also

Nader v. Allegheny Airlines, Inc. (1976) 426 U.S. 290, 300-303.)

Further, nothing in this record suggests enforcing California’s

false advertising statutes against interstate air carriers in any man-

ner conflicts with the Federal Aviation Program or impedes Con-

gress’ objectives in enacting such Program. (See Greater

Westchester Homeowners Assn. v. City of Los Angeles (1979) 26

Cal.3d 86, 93-94.) Moreover, the Federal Aviation Program

generally preserves existing common law and statutory remedies

while providing additional remedies (49 U.S.C. § 1506). Given

section 1506, state regulation of interstate air carriers is preempted

only where the federal and state regulatory schemes conflict ir-

reconcilably (Nader v. Allegheny Airlines, Inc., supra, 426 U.S.

290, 299). Nothing in this record suggests any inconsistency

between California’s false advertising statutes and the Federal

Aviation Program precluding as a matter of law their coexistence

A-4

here; any assertion of more than incidental impact on rates

resulting from California imposing liability on Western for false

advertising or from Western adopting practices to avoid such

liability involves factual issues beyond the scope of demurrer. On

this record the People’s complaint is not preempted by federal law.

Western contends state regulation of advertising by interstate air

carriers unconstitutionally burdens interstate commerce.

However, Western points to nothing in this record supporting such

contention as a matter of law. Nothing in this record suggests

California’s false advertising statutes as a matter of law

discriminate against air carriers engaged in interstate commerce or

impinge upon an area of interstate commerce requiring uniform

regulation. (See Head v. New Mexico Board of Examiners of

Optometry, supra, 374 U.S. 424, 429.) Any contention such

statutes as applied to regulate Western’s advertising unconstitu-

tionally burden interstate commerce involves factual issues beyond

the scope of demurrer.

The superior court should have overruled Western’s demurrer.

The judgment is reversed.

CERTIFIED FOR PUBLICATION.

>

BROWN

CLERK'S OFFICE, SUPREME COURT

4250 STATE BUILDING

San Francisco, CAuirornia 94102

SUL 25 1984

I have this day filed Order

eas

+ fon tae

In re: _4 Civ. No. __28920

PEOPLE

vs

WESTERN AIRLINES, INC.

Respect fut y,

Clerk

-677 8-62 4m ° OSP

Pe

C-1

STATUTES

29 U.S.C. § 1144(a) provides:

(a) Supersedure; effective date. Except as provided in

subsection (b) of this section, the provisions of this title and

title IV shall supersede any and all State laws insofar as they

may now or hereafter relate to any employee benefit plan

described in section 4(a) [29 USCS § 1003(a)] and not exempt

under section 4(b) [29 USCS § 1003(b)]. This section shall

take effect on January 1, 1975.

49 U.S.C. § 1302(a)(3), (4) and (7) provides:

(a) General factors for consideration. In the exercise and

performance of its powers and duties under this Act, the

Board shall consider the following, among other things, as

being in the public interest, and in accordance with the public

convenience and necessity:

»* * 8

(3) The availability of a variety of adequate,

economic, efficient, and low-price services by air car-

riers and foreign air carriers without unjust discrimina-

tions, undue preferences or advantages, or unfair or

deceptive practices, the need to improve relations

among, and coordinate transportation by, air carriers,

and the need to encourage fair wages and equitable

working conditions for air carriers.

(4) The placement of maximum reliance on com-

petitive market forces and on actual and potential com-

petition (A) to provide the needed air transportation

system, and (B) to encourage efficient and well-

managed carriers to earn adequate profits and to attract

capital, taking account, nevertheless of material

C-2

differences, if any, which may exist between interstate

and overseas air transportation, cn the one hand, and

foreign air transportation, on the other.

(7) The prevention of unfair, deceptive, predatory or

anticompetitive practices in air transportation, . . .

49 U.S.C. § 1305(a)(1) provides:

(a) Preemption. (1) Except as provided in paragraph (2) of

this subsection, no State or political subdivision thereof and

no interstate agency or other political agency of two or more

States shall enact or enforce any law, rule, regulation, stan-

dard, or other provision having the force and effect of law

relating to rates, routes, or services of any air carrier having

authority under Title IV of this Act [49 USCS §§ 1371 et seq.]

to provide interstate air transportation.

49 U.S.C. § 1324(a) provides:

(a) Performance of acts; conduct of investigations; orders,

rules, regulations, and procedure. The Board is empowered

to perform such acts, to conduct such investigations, to issue

and amend such orders, and to make and amend such general

or special rules, regulations, and procedure, pursuant to and

consistent with the provisions of this Act, as it shall deem

necessary to carry out the provisions of, and to exercise and

perform its powers and duties under, this Act.

49 U.S.C. § 1381 provides:

The Board may, upon its own initiative or upon complaint

by any air carrier, foreign air carrier, or ticket agent, if it con-

siders that such action by it would be in the interest of the

public, investigate and determine whether any air carrier,

foreign air carrier, or ticket agent has been or is engaged in

any unfair or deceptive practices or unfair methods of

C-3

competition in air transportation or the sale thereof. If the

Board shall find, after notice and hearing, that such air car-

rier, foreign air carrier, or ticket agent is engaged in such un-

fair or deceptive practices or unfair methods of competition,

it shall order such air carrier, foreign air carrier, or ticket

agent to cease and desist from such practices or methods of

competition.

49 U.S.C. § 1482 provides:

(a) Filing of complaints; complaints against members of the

Armed Forces. Any person may file with the Administrator

[Secretary of Transportation] or the Board, as to matters

within their respective jurisdictions, a complaint in writing

with respect to anything done or omitted to be done by any

person in contravention of any provisions of this Act, or of

any requirement established pursuant thereto. If the person

complained against shall not satisfy the complaint and there

shall appear to be any reasonable ground for investigating the

complaint, it shall be the duty of the Administrator

[Secretary of Transportation] or the Board to investigate the

matters complained of.* * *

(b) Investigations on initiative of Administrator [Secretary of

Transportation] or Board. The Administrator [Secretary of

Transportation] or Board, with respect to matters within

their respective jurisdictions, is empowered at any time to in-

stitute an investigation, on their own initiative, in any case

and as to any matter or thing within their respective jurisdic-

tions, concerning which complaint is authorized to be made

to or before the Administrator [Secretary of Transporiation]

or Board by any provision of this Act, or concerning which

any question may arise under any of the provisions of this

Act, or relating to the enforcement of any of the provisions

of this Act. The Administrator [Secretary of Transportation]

or the Board shall have the same power to proceed with any

investigation instituted on their own motion as though it had

been appealed to by complaint.

C-4

(c) Entry of orders for compliance with 49 USCS §§ 1301 et

seq. If the Administrator [Secretary of Transportation] or

the Board finds, after notice and hearing, in investigation in-

stituted upon complaint or upon their own initiative, with

respect to matters within their jurisdiction, that any person

has failed to comply with any provision of this Act or any re-

quirement established pursuant thereto, the Administrator

[Secretary of Transportation] or the Board shall subject to

section 1102(a) of this Act [49 USCS § 1502(a)] issue an ap-

propriate order to compel such person to comply therewith.

(d) Power to prescribe rates and practices of air carriers. (1)

Except as provided in paragraph (2) or (4) of this subsection,

whenever after notice and hearing, upon complaint, or upon

its own initiative, the Board shall be of the opinion that any

individual or joint rate, fare, or charge demanded, charged,

collected or received by any air carrier for interstate air

transportation of persons, air transportation of property

within the State of Alaska, air transportation of property

within the State of Hawaii, or overseas air transportation, or

any classification, rule, regulation, or practice affecting such

rate, fare or charge, cr the value of the service thereunder, is

or will be unjust or unreasonable, or unjustly discriminatory,

or unduly preferential, or unduly prejudicial, the Board shall

determine and prescribe the lawful rate, fare, or charge (or

the maximum or minimum, or maximum and minimum

thereof) thereafter to be demanded, charged, collected, or

received, or the lawful classification, rule, regulation, or

practice thereafter to be made effective.

* * *

(3) Whenever, after notice and hearing, upon complaint, or

upon its own initiative, the Board shall be of the opinion that

any individual or joint rate or charge demanded, charged,

collected, or received by any air carrier foi interstate air

transportation of property or any classification, rule, regula-

tion, or practice affecting such rate or charge, or the value of

the service thereunder, is or will be unjustly discriminatory,

C-5

or unduly preferential, or unduly prejudicial, or predatory

the Board shall alter such rate, charge, classification, rule,

regulation, or practice to the extent necessary to correct such

discrimination, preference, prejudice, or predatory practice

and make an order that the air carrier or foreign air carrier

shall discontinue demanding, charging, collecting, or receiv-

ing any such discriminatory, preferential, prejudicial, or

predatory rate or charge or enforcing any such discrimina-

tory, preferential, prejudicial, or predatory classification,

rule, regulation, or practice.

* * *

49 U.S.C. § 1487 provides:

(a) If any person violates any provision of this Act, or any

rule, regulation, requirement, or order thereunder, or any

term, condition, or limitation of any certificate or permit

issued under this Act, the Board or Administrator [Secretary

of Transportation], as the case may be, their duly authorized

agents, or, in the case of a violation of section 1114 of this

Act [49 USCS § 1514], the Attor..ey General, or, in the case

of a violation of section 40i(a) of this Act [49 USCS §

1371(a)], any party in interest, may apply to the district court

of the United States, for any district wherein such person car-

ries on his business or wherein the violation occurred, for the

enforcement of such provision of this Act, or of such rule,

regulation, requirement, order, term, condition, or limita-

tion; and such court shall have jurisdiction to enforce obe-

dience thereto by a writ of injunction or other process, man-

datory or otherwise, restraining such person, his officers,

agents, employees, and representatives, from further viola-

tion of such provision of this Act or of such rule, regulation,

requirement, order, term, condition, or limitation, and re-

quiring their obedience thereto.

‘b) Upon the request of the Board or Administrator, any

district attorney of the United States to whom the Board or

Administrator may apply is authorized to institute in the

C4

proper court and to prosecute under the direction of the At-

torney General all necessary proceedings for the enforcement

of the provisions of this Act or any rule, regulation, require-

ment, or order thereunder, or any term, condition, or limita-

tion of any certificate or permit, and for the punishment of

all violations thereof, and the costs and expenses of such pro-

secutions shall be paid out of the appropriations for the ex-

penses of the courts of the United States.

Civil Aeronautics Board Sunset Act of 1984, Pub. L. No. 98-443,

§ 3(e) (Oct. 4, 1984), provides:

(e) Section 1601(b)(1) is amended by adding at the end

thereof the following:

**(E) All authority of the Board under this Act which is not

terminated under subsection (a) of this section on or before

January 1, 1985, and is not otherwise transferred to the

Department of Transportation.”’

REGULATIONS

14 C.F.R. § 221.50 (1984) provides:

All fares, rates, and charges shall be clearly and explicitly

stated and shall be arranged in a simple and systematic man-

ner. Complicated plans and ambiguous or indefinite terms

shall not be used. So far as practicable, the fares, rates, and

charges shall be subdivided into items or similar units, and an

identifying number shall be assigned to each item or unit to

facilitate reference thereto.

14 C.F.R. § 399.80 (1984) provides:

The word ‘‘misrepresentation’’ used in this list includes

any statement or representation made in advertising or made

orally to members of the public which is false, fraudulent,

C-7

deceptive or misleading, or which has the tendency or capaci-

ty to deceive or mislead.

14 C.F.R. § 399.81 (1984) provides:

Deceptive practices in advertising of schedule perfor-

mance.

With respect to the advertising of schedule performance, it

is the policy of the Board to regard as an unfair or deceptive

practice or an unfair method of competition the use of any

figures purporting to reflect schedule or ontime performance

without indicating the basis of the calculation, the time

period involved, and the pairs of points or the percentage of

system-wide operations thereby represented and whether the

figures include all scheduled flights or only scheduled flights

actually performed.

14 C.F.R. § 399.84 (1984) provides:

(a) It is the policy of the Board to consider the practice of

an air carrier, foreign air carrier or ticket agent of advertising

a group inclusive tour involving a scheduled flight in air

transportation, to be an unfair or deceptive practice and an

unfair method of competition in air transportation or the sale

thereof, within the meaning of section 411 of the Act, unless

such advertisement clearly discloses the total tour price.

(b) For the purposes of paragraph (a), above, ‘‘total tour

price’’ means the total amount of money to be paid by the

tour participant for the group inclusive tour, exclusive of op-

tions.